April 1, 2009
The Greening of Retail
Sustainability is a journey, not a destination. Whether it’s as simple as changing light bulbs or as complex as designing a green-certified store, nearly every retailer is somewhere on that journey.
“Sustainability is complex,” says Jeanne von Zastrow, senior director, field services, for the Food Marketing Institute in Arlington, Va. “It permeates every business activity and decision. We are all on a learning curve as we begin to look holistically at the many opportunities for us to be responsive to our emerging green consumers and find ways to maximize all of our resources.”
Perhaps the best place to start is by defining sustainability, which is not as easy as it sounds.
“Sustainability is the way companies manage their businesses to produce an overall positive impact on society through environmental, economic and social actions,” says Kathy Means, vice president of the Produce Marketing Association in Newark, Del. “What is important in that mission statement is that we have three common pillars, which we call plants, people and prosperity.”
Although retailers may have lagged behind other industries in the past, they now are embracing sustainability, says Michael Arny, president of
Leonardo Academy, a non-profit organization in Madison, Wis., that promotes green practices. Supermarkets also are on board, von Zastrow says.
“The supermarket industry has responded enthusiastically to this opportunity,” she says, “particularly with the increasing focus from customers, suppliers, media, government and non-government organizations.”
FMI recently developed a task force to provide retailers the tools they need to become more sustainable.
“Many retailers now have formal sustainability leaders with active cross-functional teams in place that meet regularly and have specific goals and a strategy in place to coordinate the activities of the whole company,” von Zastrow says, “from energy to operations to marketing, consumer affairs, procurement, recycling and government relations.”
The green movement began picking up steam when the economy was still robust. Perhaps the most critical question for retailers today is, are green practices sustainable in a stagnant economy? Absolutely, says Gaylen Davenport, vice president for business development for Worldwide Energy in Overland Park, Kan. “Sustainability is green for the environment but also green for the bottom line,” he says.
“There can be tremendous cost savings, in addition to protecting the environment,” she says. “Sustainability is a good business practice. But one thing we find is that people are not paying attention to the ROI, or at what point they will break even. “
Simply put, if a business can’t pay its bills, no one will care how sustainable it is.
“An important goal is to not lose your shirt,” Means says. “Retailers will always use more energy in the produce department than in the cereal department because you have to keep the product cool. If you raise the temperature, you will have more shrink, and that is not sustainable, either.”
Many larger national chains have made a companywide commitment to sustainability while some small independent stores are taking incremental steps. The good news is that everyone can do something that will help both the environment and the bottom line.
Pruett’s Food Town in Chattanooga, Tenn., finds that common-sense practices can make a difference. “We always keep a close eye on costs,” produce manager Steven Crum says. “We do things like maintaining the ice machine, changing filters and making sure we keep the doors closed on coolers.”
The produce distribution chain, from grower to consumer, is long and complex, and there are ample opportunities for sustainable practices all along the way. Following are just a few of the possibilities:
Transportation. A significant amount of energy is used to distribute fruits and vegetables. Driving at a speed of 65 mph instead of 75 mph would save 2.8 billion gallons of diesel fuel and reduce CO2 emissions by 31.5 million tons annually, according to the American Trucking Associations in Washington, D.C. Eliminating unnecessary idling can save another 1.1 billion gallons of fuel each year. One option for retailers is to feature more locally grown produce, which requires a fraction of the transportation expenses.
Lighting. “Heating and lighting are the two things we focus on because of their immediate impact on utility costs.” Davenport says. “Big grocery chains know what is going on and try to put in the right kind of efficient lighting as part of their overhead. What we do is try to balance the right kind of lighting with energy savings. Now is a good time to take advantage of financial incentives.”
Proper lighting also can be a useful merchandising tool.
“A study of the use of skylights in big-box retail stores found that sales for existing stores jumped by 5 percent to 7 percent a month and stayed there, just by improving light levels,” Davenport says. “What is important to understand is that having energy-efficient lighting is just one component. Having the right color of light also is important to highlight your product and make it more attractive to the buyer. For example, you don’t want to use the same type of light over produce that you do over meat.”
Cleaning. “One simple thing that retailers can look at is green cleaning in the store,” Arny says. “It doesn’t have to cost more than conventional cleaning services. Just ask your cleaning provider, whether internal or external.”
Packaging. The produce industry is on the leading edge of reducing, recycling and reusing packaging.
“One key area that we all agree needs focus and proactive attention is sustainable packaging,” von Zastrow says. “We are engaged in collaborative initiatives on packaging with our sister trade associations, suppliers and other retailers.”
Composting. Non-saleable produce can be disposed of in a way that is sustainable – or perhaps even profitable.
“A lot of cities will pay for organic waste for composting,” Means says. “Other retailers have given it away for use as animal feed for years. Do a little legwork to find ways to turn challenges into opportunities.”
Supply chain. An industrywide approach to sustainability can have a synergistic effect, von Zastrow says.
“Our industry has really focused first on what we can do within our own four walls,” she says. “We've had some good success with energy, recycling, waste reduction and greener building design. The big area of opportunity is within the supply chain. There are many ways we can work with our supplier partners to streamline, reduce costs and waste and identify innovative new business practices and materials.”
Certification. Selling sustainable produce can give retailers an edge in the marketplace. The challenge, however, is documenting that it was in fact grown with sustainable farming practices. SureHarvest of Soquel, Calif., is addressing that concern by helping growers become certified.
“Throughout the chain, there is a demand for measurable and verifiable standards,” said Barbara Meister, marketing and communications manager. “Our company provides software that growers can use to track and record all farming practices, such as water and chemical use, and labor.”
SureHarvest currently is working with growers who produce 30,000 acres of stone fruit, citrus, mushroom and wine grapes. Several retailers already are requesting that their suppliers become certified, and Meister anticipates that retailers eventually will require sustainability scores, similar to what Wal-Mart is doing.
“Consumers may not understand the benefits of drip irrigation, for example, but they will be able to understand what the score means,” she said.
Putting people first
As retailers take steps toward sustainability, she reminds them to always keep consumers in mind.
“Looking over the horizon, water will be a huge focus for the future, as well as toxins and chemicals in food and household products,” she says. “Food integrity and safety is critical to the wellbeing and health of society, and working to protect our environment and resources has benefits for people, planets and profits.”
Sustainability is here to stay, experts agree. Retailers who do their homework and make sound decisions today will be well-positioned to be successful in the future.
“Sustainability is being driven by many things, including government activities and economics,” von Zastrow says. “Obviously, one of the key drivers is our diminishing resources, from water to energy to land for agriculture.
“These problems have prompted both government and business to take action. Retailers have found that by understanding and implementing new sustainable practices, there is a triple bottom-line benefit—to the planet, to people and a positive impact on profits.”
Whether testing the waters or diving in headfirst, now is the time to get in the game, Means says.
“Sustainability is a journey, not a destination,” she says. “Different companies are at different points on their journey, but you never arrive. The most important thing is that everybody is on board doing something.”